The Financial Crisis

///The Financial Crisis

The Financial Crisis

An Interview with Sister Helen Alford OP

Helen, may I ask you to briefly introduce yourself ?

I am 46 years old and belong to the Congrega­tion of St Catherine of Siena of Newcastle, Kwa Zulu, Natal, South Africa (also known as the Bushey Congregation). I was born in London, Eng­land; my mother is a daughter of two Catholic Irish immigrants who met and married in Lon­don. My father comes from Devon, England, and became a Catholic when he was 27, while he was working as a chemist in the laboratories of a dye-stuff manufacturer in Grangemouth, Scotland. I always felt privileged to have had these two dif­ferent experiences of faith during my childhood. My mother has a kind of intuitive faith, very de­votional – praying is like breathing. My father has had to think everything through and is now fascinated by biblical scholarship and spends his time in his retirement studying the Bible, using the works of the great biblical scholars to help him. I think both these ways of approaching our faith have influenced me a lot, and I think it ex­plains a lot as to why I ended up becoming a Do­minican rather than joining any other Order. I was 30 years old when I entered the novitiate.

Can you tell us in simple words what are the main characteristics of this economic-financial crisis?

This crisis follows many before it. Sisters from Asia will remember the crisis that hit the Asian economies around 1997; Sisters in Argentina will remember a series of crises; maybe we all remem­ber, from reading about it, the “Great Depres­sion” of the 1930s. Most textbooks give the first “modern” economic crisis as the “tulipomania” in Amsterdam as early as 1636 – 1637! So what causes a crisis and why don’t we learn from our mistakes in the past? The crisis occurs because a normal process in our modern economy becomes exaggerated and is pushed to excess so that it starts to undermine the economy itself. It is a bit like a cancer – cancer grows out of our normal cells, distorting the normal process of cell-production so that we start creating tumour cells that can kill us.

The normal process that starts going wrong and can lead to a crisis involves taking risks in order to create more economic value. It is essen­tial that people in the economy take risks and try to do new things – create new products, offer new services, or do the same thing for a higher qual­ity level and a lower price to the customer. Do­ing something new always involves risk, because you are not sure whether people will find your new product or service attractive, and whether they will buy it. And yet, without risk-taking in the economy, we would all be far poorer than we are now, with lower life-expectancy, very limit­ed healthcare and so on. The whole microcredit movement is based on the idea of giving poor people start-up loans so that they can set up their own businesses, take the risk of managing them, hopefully make money, and ultimately rise out of poverty. So risk-taking is essential to the econ­omy. In each of the crises, something gets exag­gerated in the process of risk-taking and takes on a life of its own – so that an “economic tumour” starts to grow. One of the reasons why crises can repeat themselves is that the way the risk-taking process gets out of control is not always the same, so we may learn lessons from previous crises that do not help us identify that a new one is happening before it is too late. In the case of the present crisis, the problem started in the banks and from two things: a new way of sharing risks called “securitisation”, and, loans to poor people in the US, called “sub-prime” loans.

The most concerning issue is specifically em­ployment: work is a critical issue for human dignity and the total development of the per­son. What do you think about this?

Yes, for the Church the key social issue is work. Through work, we contribute to society, and we grow ourselves. All over the world, people have lost their jobs due to this crisis. My brother-in-law has a construction business, and they have been very badly hit. In the short term, govern­ments can help out by organizing infrastructure projects or offering incentives to companies that take on new employees, but these measures can only be short term. In order to do these kinds of things, governments have to borrow, and gov­ernment borrowing has to be serviced (paid for) with the taxes of the people. In that sense, gov­ernments give to people with one hand and take away from them with the other. But it is impor­tant to emphasise that this kind of help can be important in the short term. The longer term so­lution is to rebuild confidence in the economy, so that the normal economic mechanisms can work that create new jobs through creating new products and services. At the same time, other changes will need to be made, changes that were touched on in the encyclical Caritas in Veritate.

One of the biggest changes will be to transfer a large number of jobs from classic businesses, ones that sell products at a profit, to what we can call the “civil society organizations”. This is because of the environmental implications of increased economic growth – in the decades and centuries ahead, we will need to develop a different idea about our economies, one that is more sustainable and that takes the needs of hu­man beings more into account too. It willprobably mean that we have lower economic growth in the classic sense (measured by gross domestic product – GDP) and that will mean that there are fewer jobs in this sector too. But we all know that there are many, many needs in our societies that are left unsatisfied and the state cannot, or can no longer, provide for them. We will need to de­velop new kinds of social business (that are eco­nomically sustainable – meaning that while they do not make a profit, they also do not need fund-raising because they generate enough income to cover their needs) and re-launch the old kinds, like the cooperatives that are still very important in Italy and the US. An interesting book to read on this question is the one by Muhammed Yunus, who received the Nobel Peace Prize a few years ago, entitled “A World Without Poverty”. But we shouldn’t forget that the Church has been cre­ating social businesses for centuries all over the place, especially in Italy and some parts of South America.

How can we transform this crisis into an oc­casion for a new reading of the poverty vow and our relationship with money?

I think a good way of starting is to follow the method devised by the Joseph Cardijn, the founder of the Young Christian Workers: “see, judge, act”. Each Sister finds herself in a very specific set of circumstances. If you are in the Bronx, or Baghdad, or Bangkok, you are going to have very different experiences of the crisis. The experience we have of this crisis sets the param­eters for how much we can use it to deepen our appreciation of the vow of poverty and our rela­tionship with money. We need to see, to judge and to act in the way that is appropriate to our specific situation.

One of the challenges for the future of con­gregations is possessing very costly build­ings which, perhaps, we do not succeed in converting in a different manner: what are your thoughts about this?

One thing that all the congregations can all do is to share examples of “best practice”, i.e. how a particular building or institution has been dealt with by a congregation when the experience has been positive and successful. Another thing is to get expert advice; I don’t mean here the standard experts like architects or investment advisors, but new kinds of professionals, like consultancies that help social enterprises set up, think tanks that promote civil society organisations, chari­table foundations with expert staff who have a lot of experience in finding new uses for build­ings, land and other assets for the spread of the Gospel and the service of the poor. We need to create shared databases of good contacts to help us with the difficult task of managing change for our good and the good of those we serve.

This interview was published  in DSI Dec 2010